Italy should strengthen reform implementation to boost skills

Recent reforms of Italy’s education system (“Buona Scuola”), labour market (“Jobs Act”) and industrial policy (“Industria 4.0”) have clear synergies and could reduce worrying imbalances between the supply and demand of skills on the Italian labour market, according to the new OECD report Getting Skills Right: Italy.

Stefano Scarpetta (Director of Employment, Labour and Social Affairs at the OECD) has said, however, that there are still a number of unresolved issues over the effective implementation of the reforms. Speaking alongside the Italian labour minister Giuliano Poletti, Mr Scarpetta said: “Italy has done a great deal over recent years and the reforms are starting to bear fruit. There are still a number of issues which, if resolved, could lead to the effective implementation of important reforms such as a programme for alternating school and work, Industry 4.0 and active labour-market policies.”

The results of the new OECD Skills for Jobs indicators, published alongside the report, provide a detailed snapshot of the most sought-after skills on the Italian labour market and differences between the various regions. The data shows high demand for skills related to knowledge of new technologies such as IT and electronics, software programming and use of digital technologies. Scarpetta said: “[Italy] still has work to do to develop the IT skills needed to confront labour-market challenges, now and in the future. Our data clearly shows major demand for digital skills across the country which, unless it is met, could have negative consequences for Italy’s growth and competitiveness.” Professionals with good knowledge of IT, new digital technologies, and medical and engineering technologies are highly prized in the Italian job market, with employability and salaries well above the average.

Even so, demand for these skills – and high-level skills in general – remains too weak and is confined to the needs of large Italian corporations. The rest of the Italian economy is concentrated in traditional, low-productivity sectors where there is little demand for high-level skills, with about 85% of Italian businesses being small and mainly family-run.

Italy is therefore in a state of equilibrium, with the supply and demand of skills tending to level downwards, in a vicious cycle that has clear negative repercussions on productivity, growth and use of new technologies.

The report also shows that many Italians specialise in areas with few employment opportunities, despite the demand for technical, engineering, technological and mathematical skills, which itself remains too weak. About 35% of Italian workers are in jobs that are unrelated to their training and 21% are in jobs for which they are over-qualified. Moreover, the report shows that this situation is associated with an average salary loss of around 17% compared to those who specialise in an area with clear employment opportunities whose skills are in demand from businesses.

The report sets out a number of points for consideration, including:

Italy needs stronger ties between the education system and the world of work at all levels. The creation of higher technical colleges (“ITS”), based on robust links with the local economy, is a welcome innovation in Italian professional training and so far has generated brilliant results, helping to develop skills that are rapidly absorbed into the Italian labour market. The new Professional Degrees also have the potential to fill the shortfall of technical skills in Italy, but to do so they must forge strong links between universities and business from the start, aiming to develop high-level professional and technical skills, rather than primarily theoretical skills as has been the case in the past.

The programme for alternating school and work is a step in the right direction, but many challenges remain. On one hand, businesses need to take a greater role in designing the content of work-based learning and, on the other hand, educational managers need adequate financial and teaching resources to forge links with businesses across Italy, including in poorer areas where there is less scope for engaging with business.

Italy needs to strengthen high-performance working practices (HPWP) such as mentoring, job rotation or flexible responsibilities. These practices are already fairly widespread in other countries but are still too rare in Italy. The skill level of Italian managers – especially in small companies – is not always adequate and needs to be improved through targeted training programmes. This would enable small businesses to grasp the importance of new technologies and be able to benefit from their productive potential.

Opportunities for workers to upgrade and update their skills must be improved through the more judicious use of funds for continuous training, linking their use to the real needs and challenges of the Italian labour market. Indeed, there are still many Italian workers with poor IT skills, little knowledge of foreign languages and a shortage of a wide range of core technical skills. Often, though, a considerable proportion of continuous training funds have been channelled into developing skills in areas that are merely incidental to the challenges posed by rapid technological change, globalisation and automation.

Active labour-market policies are a crucial challenge for Italy. In view of current institutional arrangements, Italy needs to adopt mechanisms to strengthen cooperation between the central state and the regions, by identifying clear, shared and objective parameters to ensure that unemployed persons receive the same quality of services throughout the country.

Women in leadership bring better business performance

Businesses with genuine gender diversity,
particularly at senior level, perform better, including seeing significant
profit increases, according to a new report from the Bureau for Employers’ Activities of the International Labour Organization (ILO).

The report, Women in Business and
Management: The business case for change, surveyed almost 13,000 enterprises in 70 countries. More than 57 per
cent of respondents agreed that gender diversity initiatives improved business
outcomes. Almost three-quarters of those companies that tracked gender
diversity in their management reported profit increases of between 5 and 20 per
cent, with the majority seeing increases of between 10 and 15 per cent.

Almost 57 per cent said it was easier to attract and retain talent. More than
54 per cent said they saw improvements in creativity, innovation and openness
and a similar proportion said effective gender inclusivity enhanced their
company’s reputation, while almost 37 per cent felt it enabled them to more
effectively gauge customer sentiment.

The report also found that, at national
level, an increase in female employment is positively associated with GDP
growth. The finding is based on an analysis of data from 186 countries for the
period 1991-2017.

“We expected to see a positive correlation between gender diversity and
business success, but these results are eye-opening,” said Deborah France-Massin,
Director of the ILO Bureau for Employers’ Activities. “When you consider the
efforts companies make in other areas to get just an extra two or three per
cent in profits, the significance is clear. Companies should look at gender
balance as a bottom line issue, not just a human resource issue.”

Gender balance in senior management is defined as 40-60 per cent of either
gender, the same as in the general workforce. The report says that the
beneficial effects of gender diversity begin to accrue when women hold 30 per
cent of senior management and leadership positions. However, almost 60 per cent
of enterprises do not meet this target, meaning they struggle to reap the
rewards. In addition, in almost half of companies surveyed, women account for less
than one in three of their entry-level management recruits – meaning that the
pipeline to senior management may not deliver the talent needed.

Almost three-quarters of the enterprises surveyed had equal opportunity or
diversity and inclusion policies, however, the report says more specific
actions are needed to ensure that women are visible and promoted to strategic
areas of business.

Some key factors preventing women reaching
decision-making positions were identified. Enterprise cultures that require “anytime,
anywhere” availability disproportionately affect women, relative to their
household and family responsibilities, while policies that support inclusivity
and work-life balance (for both men and women), such as flexible working hours
and paternity leave, need to be improved.

Another factor is the “leaky pipeline”, the tendency for the proportion of
women to decline as the management grade rises. The “glass wall” describes the
incidence of women managers in roles such as HR, finance and administration
that are considered less strategic and less likely to lead to chief executive
and boardroom positions. Fewer than a third of enterprises surveyed had
achieved the critical mass of one third of women board members. Around one in
eight reported they still had all-male boardrooms. More than 78 per cent of
enterprises who responded had male CEO’s, and those with female CEO’s were more
likely to be small enterprises.

“The business case for getting more women into management is compelling,” said
France-Massin. “In an era of skill shortages, women represent a formidable
talent pool that companies aren’t making enough of. Smart companies who want to
be successful in the global economy should make genuine gender diversity a key
ingredient of their business strategy. Representative business organizations
and employer and business membership organizations must take a lead, promoting
both effective policies and genuine implementation.”

Related

Advanced economies still have plenty of work to do to reach Sustainable Development Goals

With only 11 years left to achieve the 2030
Sustainable Development Goals, some of the most economically advanced countries
have still not met targets in areas like poverty reduction, youth employment,
education and training, gender equality and numerical literacy, according to a
new OECD report.

Measuring
Distance to the SDG Targets 2019: An Assessment of Where OECD Countries Standfinds that in most OECD countries there is
widespread access to electricity, mobile networks and basic sanitation.
Countries have met targets for maternal and infant mortality; and are making
progress in reducing deaths from AIDS, TB, Hepatitis B, and road accidents.
They are also cutting smoking and gradually adopting renewable energy sources.
Yet, OECD countries are still leaving many people behind, and are struggling to
reach the targets related to gender equality and to reducing inequality. Even
more worrisome, some countries are moving in the wrong direction on some
targets, with worsening performance since 2005.

In particular, medium-term GDP growth and
productivity growth are on the wane in many countries. One in seven people in
the OECD area live in poverty, and one in four 15-year-olds and adults lack
basic numerical competency. Obesity and unemployment have been rising in one
third of OECD countries since 2005, and in 13 countries vaccination coverage is
dropping, risking outbreaks of diseases thought to have been eradicated. The
number of threatened species is on the rise in two thirds of OECD countries.

“The SDGs and the 2030 Agenda objective of
leaving no one behind are our promise and our responsibility to future
generations. Unfortunately we are very far from being able to declare Mission
Accomplished,” said OECD Secretary-General Angel Gurría, launching the report
at the start of the annual OECD Week. “We must all redouble our efforts, with
countries working together to make sure that the goals are achieved within the
deadline that the international community set four years ago. We owe it to our
children and to our planet.”

The report uses a unique methodology that
enables a comparison of countries’ progress and data gaps across the 17 SDG
Goals and the specific targets that underpin them, using the UN Global List of
244 indicators as a starting point. It also finds that over half the 2030
targets involve a transboundary effect, meaning that achieving them in one
country will have an impact in others or on global goods, such as climate.

Key findings in the report include:

Around 14% of the OECD population lives in relative poverty, far from the goal of halving poverty rates (half of the median rate in OECD countries is 5.5%).

Across the OECD, 14% of youths are not in education, employment or training. Rates are above 20% in Italy and Turkey, and are at least 17% in Chile, Mexico and Spain.

Women hold fewer than one-third of seats in national parliaments on average in the OECD, with no country achieving the target level (i.e. equal representation).

Official development assistance (ODA) is still running at less than half the UN target of 0.7% of national income.

Some 6% of women across the OECD report having been subjected to violence by a partner in the last 12 months [and as high as 11% in some countries]. This is far from the target to eliminate all forms of violence against women and girls.

Significant data gaps for the UN Global List of indicators mean that performance on more than one-third of the SDG targets cannot be assessed in OECD countries. Environment goals contain some of the biggest data gaps.

Related

Data Collaboration for the Common Good

Delivering on the promise of public-private data
collaboration for the common good requires attention in five priority areas
according to a new report, Data Collaboration for
the Common Good, published by the World Economic Forum today.

The report, done in collaboration with McKinsey
and Company, represents a year-long effort with business, government, civil
society leaders, experts and practitioners to advance public-private data
collaboration to address some of the world’s most pressing humanitarian and
sustainable development challenges.

The linking, connecting and sharing of data has
emerged as one of the primary factors shaping today’s digital economy. From
2017 to 2019, the number of companies forming data-related partnerships has
risen from 21% to 40%. Against this backdrop, the report provides an evidence
base of use cases of data collaboration for the common good as well as
pragmatic tools for strengthening stakeholder trust.

“Having experienced the positive impact of
public-private data collaboration in improving the epidemic readiness in South
Korea myself, I sincerely believe in the promising future that public-private
data collaboration will lead us into,” said Dr. Chang-Gyu Hwang, Chairman
and CEO of KT. “I would like to encourage more world leaders and thinkers
to join World Economic Forum’s effort to make lasting and fundamental changes
for humanity with trustworthy data and data collaboration.”

The report provides a holistic governance
framework designed to strengthen trust, balance competing interests and deliver
impact. It offers insights to balance both the need to innovate in the use of data
and the mandate to protect vulnerable populations against known and emerging
harms.

Responsible data governance – Build a secure, resilient and fit-for-purpose governance and technical
infrastructure and invest in comprehensive data-impact assessments to identify
and manage the risks to vulnerable populations and communities.

Insight generation and validation – Verify the provenance, completeness and accuracy of data inputs and
establish effective governance processes on how packaged data products/services
will be used to make decisions in the field.

Insight adoption – Invest in last-mile implementation capacities and the leadership to create
a data culture within organizations with

Given the likelihood and severity of disease
outbreaks and natural disasters resulting from climate change, the report calls
for a greater focus on how private sector data can be used for epidemic
readiness and natural disaster preparedness.

“Public-private data collaboration is
foundational for building a shared digital future that is more inclusive,
trustworthy and sustainable,” notes Derek O’Halloran, Head of the Future of
Digital Economy and Society, World Economic Forum. “This new report provides
pragmatic approaches for using private sector data to deliver faster
decision-making during natural disasters, a better understanding for how to be
ready for epidemics and new ways to measure progress on achieving the SDGs.”